Coles may face $5 million fine for fresh bread claims

The Australian Competition and Consumer Commission has made submissions to the Federal Court, calling for Australian supermarket giant Coles to be fined$5 million for misleading labels on bread products sold fresh bread.

Australian Food News reported in September 2014 that the Federal Court had found Coles guilty of misleading shoppers with false claims on bakery products that were advertised as “baked today, sold today” and “freshly baked in-store”, when this was not the case. The Federal Court banned Coles from making claims that its bread products are ‘freshly baked’ or baked on the day for three years. The judgement came after court action was initiated by the Australian Competition and Consumer Commission in June 2013, alleging false, misleading and deceptive conduct in the supply of bread that was partially baked and frozen off site, transported to Coles stores and ‘finished’ in-store.

In a penalty hearing in the Federal Court on Tuesday, the ACCC said it was seeking penalties of at least $4 to $5 million over the Australian consumer law breaches. Colin Golvan, SC, said a hefty fine was appropriate due to the size of the company, scale of conduct and consumer reach.

However, it has been reported that lawyers for Coles debated the severity of the misleading conduct, saying continuing strong sales of partially baked bread, despite revelations it was not made wholly in-store, showed the consumer “doesn’t care”.

The ACCC’s investigation into Coles’ marketing tactics was prompted by a complaint about bread labelling from former premier Jeff Kennett, who discovered a loaf of bread that was advertised as freshly baked in-store had in fact been made in Ireland.

Federal Court Chief Justice James Allsop will shortly announce his decision on the size of the penalty.